New EFTPOS Charges Will Affect Consumers

Information verified correct on October 25th, 2016
EFTPOS machine pin-pad

EFTPOS transaction fees are now going to be passed on to retailers.

Initially, it may sound like good news to consumers but upon further discussion, one may realise the possibility of this fee being consequently passed on to consumers. Previously, banks charge transaction or interchange fees for every use of the EFTPOS service.

A study on banking fees reveal that banks will make an additional $150 million this year due to the scrapping of interchange fees as a bank cost and passing it on to retailers instead. The study was conducted by the competitor payment network Tyro. It showed that the interchange fee income of Australian banks’ credit and debit cards will go up by $300 million. In 2008, the banks made profit of around $900 million and the profit is expected to increase to approximately $1.23 billion by the end of the financial year.

The profit arising from the new EFTPOS is camouflaged with the banks’ current huge profits. For instance, the National Australia Bank (NAB) posted a 23.6 percent increase in its annual profit over the past year. It was a record high of $5.22 billion.

ePAL, the company that operates the EFTPOS system, is wholly owned and funded by the 14 founding members:

The EFTPOS system is a very popular form of card payment in Australia and New Zealand but its service has been far from perfect. There were instances of computer malfunctions at NAB, Commonwealth Bank and Westpac Bank. According to the Reserve Bank of Australia’s (RBA) annual report on payment systems board, this has caused a lot of EFTPOS outages last year. A lot their customers were affected and unhappy.

To make up for losses and unwarranted service disruptions, the system is currently undergoing an upgrade in its functionalities with the hopes of improving its service and widening its customer base. EFTPOS will try to compete with card payment giants like Visa and Mastercard. As this two have offered mobile payment and contactless services, EFTPOS upgrades its services to be at par with the two. ePAL member banks have released new cards that features the chip technology that Visa and Mastercard use to accommodate the cards on contactless terminals. It is currently on its dry run phase. ePAL will have a full-blast launch by the second semester of next year.

Nonetheless, customers may be looking forward to these new functionalities that they can enjoy using their EFTPOS card but are having reservations with the possibility of shouldering a passed on cost from the extra fee that retailers incur due to the interchange fees that EFTPOS is charging them. ePAL should watch out for this and make sure that it will not happen. Otherwise, their efforts to compete with Visa and Mastercard will go to waste.

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2 Responses to New EFTPOS Charges Will Affect Consumers

  1. Default Gravatar
    Les | September 23, 2016

    I notice a local restaurant charges $3.00 extra (advertised) when quoting a price for a meal when utilising an eftpos card. It’s a significant difference. Is this allowed ?

    • Staff
      May | September 23, 2016

      Hi Les,

      Thanks for your question.

      When a merchant or business accepts credit card payments, they are actually allowed to charge a surcharge fee that is at an acceptable cost. So for instance, if a business is charged 3% for an AMEX payment (this is called a merchant fee for accepting AMEX cards), they could only apply a surcharge worth up to 3% of the total transaction amount if you paid with an AMEX card.


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